The US has reached a deal with Canada to lift tariffs on steel and aluminium imports in a move that could lead to approval for a new North American trade deal.
It is widely expected the US and Mexico will make a similar announcement soon.
The US implemented the tariffs last year on grounds of “national security”.
Under the agreement, there will be no quotas on how much steel or aluminium the three countries buy from overseas.
What does the agreement mean?
Getting rid of the tariffs is viewed as a key hurdle to approval for the US-Mexico-Canada Agreement (USMCA) trade deal which was signed in 2018. It replaced the North American Free Trade Agreement.
Remember the USMCA trade agreement – meant to replace NAFTA? No?
Hardly a surprise. It has been languishing in the background.
This now raises the odds of it crossing the finishing line, opening up a new era of trade expansion in North America.
For Mr Trump, who loves tariffs so much he called himself the ‘tariff man’, this would be a big win.
And who knows, trade peace in North America might even strengthen his hand in negotiations with China.
It also targeted US farm goods as well as items like tomato ketchup and household products.
The White House has put back the decision by six months to allow more time for trade talks with the European Union and Japan.
Tariffs of up to 25% on imported cars and car parts were under consideration.
A report by the Commerce Department claimed that imports of foreign-made cars and auto parts into the US were a threat to national security.
The president said he agreed with the study’s finding that imported cars and trucks were “weakening our internal economy”.
How are US relations with major trading partners?
The US President characterised it as a “little squabble”.
However, shortly afterwards, Mr Trump declared a “national emergency” to protect US computer networks from “foreign adversaries”.
While the announcement did not name any individual companies, it was widely perceived to be directed at Huawei, the Chinese telecoms equipment maker, which has faced claims its products could be used by China for surveillance.